so I have been playing around with cloth simulation, and was doing a low-poly bend and made a blanket on top. and then used cloth simulation on the plane and collision on the cube. first, I had a subdivision surface modifier on the cube and when I played the simulation, the cloth would go inside the cube and rest in the middle of the cube, then I used a cube of similar proportion but did not subdivide it, and the result was the same. then I made a new plane way bigger than the cube, applied the cloth physics property but the result was the same.
note: when I try this in a new file all the result is normal but only on this file, there is a problem.
This can be because if many problems you should try these:-
Make sure that all modifiers on cube are applied and that on plane the cloth simulator is the last modifier or is only equipped with cloth modifier.
Also increase permeability of collision modifier on the cube as 1 and check that it is setted to volume rather than being on object origin.
Also try deleting and again adding the cube in the file it is not working.
If it still don't work then you may even delete the plane and add it again in your scene.